Barrenjoey pays bankers’ bonuses in monthly instalments

afr.com:

Barrenjoey Capital Partners is paying its deal makers their bonuses in monthly instalments, instead of quarterly, as investment banks ride out the downturn in fees and come up with creative ways to mitigate defections.

The investment bank will pay staff their variable compensation each month, on top of their fixed salary, over the next year, people familiar with the bonus timetable told The Australian Financial Review.

Bonuses are usually disbursed through a combination of cash, plus equity, which vests over a number of years.

Junior bankers often receive a cash bonus in one lump sum, while senior bankers receive cash and stock. Investment banks headquartered in the United States typically announce bonuses in January and European banks pay their staff in February.

“Some of the reasons why people joined Barrenjoey include bonuses being paid over 12 months, not being deferred for three to four years, while still being able to enjoy the long-term growth from being a shareholder,” a spokesman for the bank said.

Barrenjoey held “envelope day” – Wall Street shorthand for when bankers learn their windfall – in late August.

The decision to make monthly payments comes after its employment expenses increased to $174 million for the 2023 financial year, from $145.4 million a year earlier.

The Australian bank reported a $26 million net loss over the past financial year. It also invested approximately $62 million to set up new business units, including prime brokerage services, while the lease for its new offices at 50 Bridge Street, Sydney, will cost $58.7 million over a 10-year period, the Financial Review reported last month.

Barrenjoey staff hold about 45 per cent equity in the business. Investment manager Magellan has a 36 per